When you think about it, running a business is all about making decisions. Let’s face it: if you didn’t have the drive to be a decision maker, you’d work for someone else, right? As an entrepreneur, you’re faced with decisions every day – whether it’s a question about hiring a new employee, embarking on a new marketing plan, or managing costs by improving efficiency. Successful business owners make good decisions, and the good news is that you can improve your decision making skills by following these tips:
- Follow the 10-10-10 rule. Biz guru Suzy Welch gives us this technique for making decisions based on their long-term effects. Consider the outcome of your decision in ten minutes, ten months, and ten years. Let’s say you’re struggling with a particularly difficult client – the one who sucks up all of your time and energy and provides little in the way of revenue. You’re trying to decide if you should kiss up to them for the umpteenth time to smooth over their latest ridiculous complaint or if you should cut your losses, fire them, and move on. If you fire them, you know that in ten minutes, you’ll be panicked, worried about the loss of revenue. But in ten months, you’ll realize that you’ll be happier for having eliminated the anguish this client produced, and in ten years, you’ll have been able to generate far more income from new, less problematic clients that you’ve been able to bring in with your renewed energy and freed-up time. Think long-term.
- Create a stop-loss plan. And follow it! Entrepreneurs are seldom devoid of ego, and it’s far too easy to make a decision, ignore all the signs that the decision wasn’t the wisest, and continue well past the point at which you should have thrown in the towel. A stop-loss plan forces you to evaluate your decision based on predetermined, concrete parameters, rather than on the results you’re hoping for. Whether it’s a trial period for the pricy new sales rep you hired on, or whether it’s a minimum requirement for a new advertising campaign, you’ll make better decisions if they’re based on results, rather than hopes and ego.
- Employ split testing. When you’re torn between two (or more) equally plausible choices, use split testing to try both options out before you commit to one. Let’s say the sales rep for the community circular that you advertise in brings you two options for your next ad. If you have the chance to run both ads, perhaps in different areas, or in different months, you can find out definitively whether the ad that touts your long-established history in the area is more effective than the ad that shows off your reasonable prices. The idea is to make a decision based on hard data, rather than assumptions. Online advertising makes it particularly easy to run split testing, as you can create and employ multiple variations with ease.
- Do thorough research. You’d feel like a fool if you tried and failed with some radical new tactic to bring in new business only to discover afterwards that your competitor had already tried and failed with that tactic. Look around you. See what your competition is up to, and look to history to give you insight into proven – and disproven – strategies. Fortune does favor the bold – those folks who forge new pathways – but fortune also favors those who do their homework.
- Sleep on it. This last tip is the easiest and most foolproof of all. People make decisions based on emotion, and that’s often a mistake. Simply giving yourself time to think a decision over will almost always lead you in the right direction.
Hiring, firing, spending, saving … all decisions that we face every day. Commit to making better decisions, and you’ll find those good decisions reflected in your bottom line.Tags: Customer service, Decision Making, Entrepreneur, Mondays with Mike, Money Management, Startup, Strategy, Team Management